Tariff Talk

As February 1 came to a close, President Trump made good on his campaign promise of new tariffs. The signed executive orders impose an additional 25% tariff on imports from Mexico and Canada and an additional 10% tariff on imports from China, effective February 4. The orders invoke the International Emergency Economic Powers Act (IEEPA), among other authorities, citing concerns related to illicit drugs crossing U.S. borders, particularly fentanyl, as well as illegal immigration at the southern border. Details on the implementation of the orders will be released through the responsible agencies and published in the Federal Register.

In response, Canadian Prime Minister Justin Trudeau announced that a 25% tariff would be applied to C$155 billion of U.S.-origin goods. The first phase, covering C$30 billion in goods, is set to take effect on February 4, with an additional C$125 billion in goods subject to a 21-day public comment period before implementation.

Mexican President Claudia Sheinbaum stated that Mexico would move forward with its Plan B but did not provide further details. Sheinbaum had previously indicated that Mexico had prepared response plans.

Meanwhile, China’s Ministry of Commerce announced that it would challenge the U.S. tariff measures through the World Trade Organization (WTO).

There is much to absorb in these orders, and the trade sector anxiously awaits additional implementation guidance and Federal Register notices for specifics. OCEANAIR is committed to providing updates on this evolving issue.